Correlation Between Glanbia PLC and FBD Holdings
Can any of the company-specific risk be diversified away by investing in both Glanbia PLC and FBD Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Glanbia PLC and FBD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glanbia PLC and FBD Holdings PLC, you can compare the effects of market volatilities on Glanbia PLC and FBD Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Glanbia PLC with a short position of FBD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glanbia PLC and FBD Holdings.
Diversification Opportunities for Glanbia PLC and FBD Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Glanbia and FBD is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia PLC and FBD Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FBD Holdings PLC and Glanbia PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Glanbia PLC are associated (or correlated) with FBD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FBD Holdings PLC has no effect on the direction of Glanbia PLC i.e., Glanbia PLC and FBD Holdings go up and down completely randomly.
Pair Corralation between Glanbia PLC and FBD Holdings
Assuming the 90 days trading horizon Glanbia PLC is expected to under-perform the FBD Holdings. In addition to that, Glanbia PLC is 1.25 times more volatile than FBD Holdings PLC. It trades about -0.13 of its total potential returns per unit of risk. FBD Holdings PLC is currently generating about 0.03 per unit of volatility. If you would invest 1,240 in FBD Holdings PLC on August 31, 2024 and sell it today you would earn a total of 10.00 from holding FBD Holdings PLC or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Glanbia PLC vs. FBD Holdings PLC
Performance |
| Timeline |
| Glanbia PLC |
| FBD Holdings PLC |
Glanbia PLC and FBD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glanbia PLC and FBD Holdings
The main advantage of trading using opposite Glanbia PLC and FBD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glanbia PLC position performs unexpectedly, FBD Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FBD Holdings will offset losses from the drop in FBD Holdings' long position.| Glanbia PLC vs. Kerry Group | Glanbia PLC vs. Kingspan Group plc | Glanbia PLC vs. Bank of Ireland | Glanbia PLC vs. Dalata Hotel Group |
| FBD Holdings vs. Glanbia PLC | FBD Holdings vs. Kingspan Group plc | FBD Holdings vs. Kerry Group | FBD Holdings vs. Dalata Hotel Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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